By Catherine Austin Fitts
Goldman Sachs has now settled with the Federal Housing Finance Agency. It appears that Goldman did not want to generate more new revenues for federal agencies that Congressional appropriators could use to buy more elections or reward the very housing regulators and enforcers who engineered the housing bubble. Good for them. Instead, they bought the mortgages back from Freddie and Fannie. Imagine Freddie and Fannie saying in court that they were misled. Wow.
Aljazeera points out that all of these settlements do very little, if anything, to help the people harmed. (See “Blockbuster bank settlements leave consumers hanging.”) I agree.
If you look at the people who caused the housing bubble, they are essentially suing each other and shuffling money back in forth in a paper drama. It appears the Federal Reserve is buying up most if not all of the fraudulent paper and putting lots of fresh, windfall cash back in their pockets. (Although given Europe’s support of the US in Ukraine, you wonder how much of the Fed’s largesse has been buying friends in the European institutions – or clawing it back in settlements like BNP when the French don’t keep their promises.)
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A reminder of the emptiness of this game comes with the announcement that the Bank of America will have a $12 billion write off from its $17 billion mortgage settlement. (See BofA Grabs $12 Billion Tax Write-Off From $17 Billion Mortgage Settlement)
Bank of America’s settlement woes are a reminder of what happens when you do business with the Department of Treasury and the Department of Justice. Bank of America picked up Merrill Lynch and Countrywide to help prevent a financial meltdown. Since the Treasury and DOJ engineered the housing bubble, DOJ then coming after them for $17 billion related to the portfolio of fraud they just agreed to resolve for them is a bit much. Since the US government engaged home buyers in massive fraudulent inducement, it is funny that they also did it to Bank of America. If you tried to describe the hypocrisy involved, you would need an entire Dostyoevsky-like novel.
Some of the settlements are clearly a way of laundering the largesse into the pockets of the perpetrators who do not have a mechanism to receive their share of the profits. So, Andrew Cuomo, former Secretary of HUD who did such an outstanding job engineering the housing bubble or protecting Wall Street as NY Attorney General, is handing out money during his campaign as we speak as a result of the settlements flowing into New York State coffers. And his fellow Clinton Administration colleague, Eric Holder, who was critical to facilitating the reengineering of HUD to serve the housing bubble, is garnering headlines for settlements as he collects more money for the appropriators to fund his operation and lots of campaign pork.
This is the game that evolves when entirely too much federal credit is handed out at below market prices and an extensive regulatory and enforcement structure is then created to channel it to where the centralized system wants it to go. Call it soviet, call it fascism, call it Orwellian, whatever you call it, you just need to know that the vast majority of the judicial and enforcement actions are simply another cycle in the scam.
If you live in New York and you are going to vote for Andrew Cuomo, go look in the mirror. You are the problem. If you live in Ferguson, Missouri and you went to a community meeting and clapped for Eric Holder, go look in the mirror. You are the problem.
As long as the people being skimmed and played buy the story, the story will roll on…
Related Reading:
It’s Official: The Housing Pump and Dump is Over
SEC Adopts Rules on Mortgage Backed Securities
